PSBs Canara Bank, Bank of Baroda, UCO Bank hike key lending rates across tenures after RBI MPC verdict; Check dates here

Leading public-sector banks (PSBs) Bank of Baroda, Canara Bank, and UCO Bank have hiked their marginal cost of funds-based lending rate (MCLR) across tenures, making most consumer loans costlier. The move comes one after the Reserve Bank of India (RBI)'s rate-setting panel announced its monetary policy verdict, keeping the benchmark interest rates at 6.50 per cent for the ninth straight meeting.

Bank of Baroda has changed the MCLR effective from August 12 some tenures. The Asset Liability Management Committee (ALCO) of UCO Bank will hike the lending rate by five basis points (bps) for some tenures effective from August 10. Canara Bank will hike the lending rate by five bps across tenures from August 12.
 

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New lending rates for Canara Bank, Bank of Baroda, UCO Bank:

Canara Bank: The benchmark one-year tenor MCLR, used to price most consumer loans such as auto and personal, will be at nine per cent against the earlier rate of 8.95 per cent. The three-year MCLR will be 9.40 per cent, while for two-year, it will be 9.30 per cent, up five bps.

Canara Bank's one-month, three-month, and six-month tenor rates will be 8.35-8.80 per cent, and the MCLR on overnight tenor will be 8.25 per cent against 8.20 per cent. The new rates are effective August 12, 2024.

Canara Bank's net profit rose 10 per cent to ₹3,905 crore for the first quarter ended June 30, driven by a reduction in bad loans. The Bengaluru-based lender had earned a net profit of ₹3,535 crore in the year-ago period.

During the quarter, the bank's total income increased to ₹34,020 crore, up from ₹29,823 crore a year ago. Its net interest income increased six per cent to ₹9,166 crore, up from ₹8,666 crore in the same quarter a year ago.

On the asset quality side, the bank's gross non-performing assets (NPAs) moderated to 4.14 per cent of gross advances as of June 30, 2024, from 5.15 per cent at the end of the first quarter of the previous fiscal. The net NPAs also came down to 1.24 per cent of the advances from 1.57 per cent at the end of the first quarter of last year.

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UCO Bank: The Kolkata-based PSB hiked MCLR for the one-month tenor from 8.3 per cent to 8.35 per cent and the one-year MCLR from 8.9 per cent to 8.95 per cent. It revised TBLR for one month from 6.85 per cent to 6.7 per cent and TBLR for 12 months from 7.0 per cent to 6.9 per cent. The PSB reduced the Treasury bill benchmark linked rates by 5-15 basis points.

UCO Bank reported a 147 per cent year-on-year jump in net profit to ₹551 crore in the April-June quarter. The lender’s bottom line a year ago stood at ₹223 crore in the corresponding period. The bank also reduced its gross NPA from April to June by 116 basis points to 3.32 per cent, while net NPA declined by 40 basis points to 0.78 per cent.

Operating profit in the reporting quarter was ₹1,321 crore, registering a growth of 9.81 per cent over the year-earlier period. The bank’s total business grew 11.46 per cent on-year to ₹4,61,408 crore, while gross advances increased 17.64 per cent to ₹1,93,253 crore. Total deposits rose 7.39 per cent year-on-year to ₹2,68,155 crore in the three months ended June.
 

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Bank of Baroda (BoB): The Mumbai-based PSB said it revised MCLR for the three-month tenor to 8.5 per cent from 8.45 per cent, and the six-month bucket to 8.75 per cent from 8.7 per cent. The revised MCLR for one-year loans will be 8.95 per cent, up from 8.9 per cent. BoB hiked the lending rate by five bps on three-month, six-month and one-year tenures from August 12.

BoB reported a 6.19 per cent growth in June quarter consolidated net profit at ₹4,727.81 crore, as the state-run lender calibrated loan growth. On a standalone basis, the public sector bank's net profit grew 9.5 per cent to ₹4,458 crore.

Bank of Baroda said its core net interest income grew 5.5 per cent, with lower advances growth of 8.1 per cent and the net interest margin narrowing by 0.09 per cent to 3.18 per cent. The overall deposit growth came at 8.9 per cent.

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The overall provisions for bad assets declined 25 per cent to ₹1,269 crore, while the total provisions nearly halved to ₹1,011 crore. The gross non-performing assets ratio improved to 2.88 per cent as of June 30 from 2.92 per cent in March.

RBI MPC Verdict

The RBI unveiled its third monetary policy committee (MPC) meeting for 2024 on August 8, keeping the benchmark rate steady at 6.50 per cent and policy stance unchanged for the ninth straight meeting, saying it could not afford to look through persisting high food inflation.

RBI Governor Shaktikanta Das-led rate-setting panel revealed the monetary policy decision after a two-day review meeting that began on Tuesday. The decision comes amid rising food prices and ongoing geopolitical headwinds threatening demand and supply to India's commodities basket.